EXHIBIT 10.29
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement shall be effective as of May 7 ,2002, and is
entered into by and between Aura Systems, Inc., a Delaware corporation ("Aura"),
and CRS Emergency Vehicles, Co. ("CRS"), an Oklahoma corporation, Custom Coaches
International, an Oklahoma corporation ("CCI"), and C. Xxx Xxxxx, individually
(hereinafter be referred to collectively as the "Defendants"). This Settlement
Agreement is entered into with reference to the following facts:
RECITALS
A. WHEREAS, on or about December 11, 2001, Aura caused a Complaint to be
filed against Defendants in the action which is commonly known as Aura v. CRS
Emergency Vehicles, Co., et al, United States District Court Case No. 01-10612
DDP (BQRx). Said Complaint shall hereinafter be referred to as the "Action."
B. WHEREAS, the Complaint in the Action sought recovery with respect to
Defendants' breach of a Distributor Agreement (attached to the Complaint as
Exhibit "A") arising from Defendants' failure to pay for 400 units of AuraGen
G5000 and G8500 generators. The amount sought by Aura in the Action was:
$1,341,472, which includes the following: damages1: $1,234,729; pre-judgment
interest2: $78,009; attorneys fees3: $28,294; and costs4: $440.
C. WHEREAS, in response to the allegations of Aura in the Action,
Defendants' Answer admits to certain allegations plead in Aura's Complaint and
denies certain allegations.
D. WHEREAS, the Defendants represent that only 399 units were shipped
instead of the 400 alleged by Aura (hereafter "Shipped Units") and that four of
the Shipped Units were used to replace units previously sold by Aura under
warranty. The one missing unit shall hereafter be referred to as the "Missing
Unit." The Defendants further represent that they have in their possession the
395 Shipped Units and the four units that were replaced (hereafter "Swapped
Units"). They further represent that the remaining Shipped Units are in good
order and condition.
E. WHEREAS, Aura and the Defendants now wish to resolve all disputes
existing between them with respect to any and all matters and claims, both known
and unknown, arising from or related to the nonpayment of the Product as
asserted in the Complaint and in all discovery and pleadings in the Action,
based on the terms and conditions of this Settlement Agreement ("Agreement").
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Affirmative Obligations of the Defendants (hereafter "Affirmative
Obligations"):
i. Upon the signing of this Agreement, Defendants agree to immediately
make available the Shipped Units and the Swapped Units to Aura or their
designated representative. Aura will pick up and transport the Product at
Aura's expense.
ii. Defendants shall use their best efforts to conduct a search for
and, if found or located, immediately return, at their expense, the Missing
Unit.
iii. Upon the signing of this Agreement, Defendants shall turn over to
Aura all documentation relating, in any way, to the Swapped Units
including, but not limited to, work orders, purchase orders, warranty
documentation, packaging materials or any similar documentation containing
information regarding the Swapped Units.
iv. Upon the signing of this Agreement, Defendants shall return to
Aura any and all documentation relating to its performance under the
Distributor Agreement and/or its status as an AuraGen(TM) distributor,
whether or not such documentation was supplied to them by Aura in the first
instance, including, but not limited to, all certificates, advertising,
sales or marketing materials, manuals or instruction materials, warranty
documentation, and the Distributor Agreement.
v. The Defendants agree to waive any rights they might otherwise have
in connection with the Distributor Agreement and to any warranty or service
obligation on the part of Aura as to the Missing Unit or the Shipped Units
used to replace the Swapped Units.
2. Dismissal With Prejudice Within ten (10) days of full performance of all
of the Affirmative Obligations, Aura shall cause to be filed with the Court a
dismissal of the entire Action.
3. Standstill Agreement and Waiver of the Statutes of Limitations The
parties hereto agree that the Action is to be stayed in its present state as to
all matters pending the full performance of all of the Affirmative Obligations,
and that, prior to that time, the Action may be fully reactivated at Aura's
election upon the breach of this Agreement by any of the Defendants. The parties
further waive the application of all laws, rules or statutes of repose requiring
the timely bringing or prosecution of claims (including, but not limited to, the
statutes of limitations; the doctrines of waiver, estoppel and latches), as to
all claims which are or which might be reasonably assertable in the Action by
way of the current Complaint or by way of the filing of an amended complaint
against any of the Defendants.
5. Release Except for any remaining rights or obligations as have been
created under this Agreement, upon full performance by Defendants of all of the
Affirmative Obligations, Aura and Defendants hereby fully, completely, finally
and forever release, relinquish and discharge each other and each of their
respective parent companies, predecessor companies, subsidiaries, affiliated
companies, related entities, agents, present and former employees, attorneys,
insurers, successors and assigns (which said aforementioned released parties
shall hereinafter be referred to collectively as "Releasees"), of and from any
and all claims, actions, causes of action, demands, rights, debts, agreements,
promises, liabilities, damages, accountings, costs and expenses, whether known
or unknown, suspected or unsuspected, fixed or contingent, of every nature
whatsoever, which relate to the claims asserted in the Action. Each party to
bear their own attorney's fees and costs. All matters released hereunder, shall
sometimes hereinafter be referred to as the "Released Claims."
IT IS THE INTENTION OF THE PARTIES HERETO THAT THIS DOCUMENT SHALL BE
EFFECTIVE AS A FULL AND FINAL ACCORD AND SATISFACTION AND RELEASE OF EACH
AND EVERY RELEASED CLAIM. IN FURTHERANCE OF THIS INTENTION, THE PARTIES
HERETO, AND EACH OF THEM, ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED BY LEGAL
COUNSEL AND ARE FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE
SECTION 1542, WHICH PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
THE PARTIES HERETO, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY
WAIVE ANY RIGHTS THEY MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER
STATUTES OR COMMON LAW DOCTRINES OF SIMILAR EFFECT.
The parties hereto, and each of them, acknowledge that they may hereafter
discover facts in addition to, or different from, those which they now know or
believe to be true with respect to the Released Claims, but that,
notwithstanding the foregoing, it is their intention that this release operate
to fully, finally, completely and forever settle and release each Releasee from
each, every and all of the Released Claims, and that in furtherance of such
intention, the releases herein given shall be and remain in effect as full and
complete releases, notwithstanding the discovery or existence of any such
additional or different facts.
The parties hereto warrant and represent to each other that as to any
Released Claim, the party releasing same is the sole and absolute owner thereof,
free and clear of all other rights and interests therein and has the right,
ability and sole power to release such Released Claims, and the releasing party
agrees to hold harmless and indemnify the released parties from any liability or
claim asserted against a released party which is based on a claim which the
releasing party purported to release hereunder.
6. Attorneys Fees In the event there is any dispute concerning the terms of
this Agreement or the performance of any party hereto pursuant to the terms of
this Agreement, and any party hereto retains counsel for the purpose of
enforcing any of the provisions of this Settlement Agreement or asserting the
terms of this Agreement in defense of any suit filed against said party, the
prevailing party in such a dispute shall be entitled to recover, in addition to
any other remedy to which such party may be entitled, all of its costs and
attorneys fees in connection with the dispute, including costs and attorneys fee
incurred on appeal, irrespective of whether or not a lawsuit is actually
commenced or prosecuted to conclusion.
7. No Admission of Liability The existence of this Agreement nor the
conduct of any of the parties hereto shall constitute or be construed as an
admission of any liability or any wrongdoing whatsoever on the part of any of
the parties hereto.
8. Interpretation In the event that any language in this Agreement is held
to be uncertain, any such language shall not be interpreted against any party to
the Agreement based on who drafted such language.
9. Authority The undersigned further represent and warrant that they have
taken all actions and obtained all authorizations, consents and approvals as are
conditions precedent to their authority to execute this Agreement.
10. Counterparts This Agreement may be signed in counterparts which will be
binding upon the parties hereto as if all of said parties executed the original
hereof.
11. Facsimile Signatures This Agreement may be executed by facsimile
signatures. A copy of this Agreement bearing a facsimile signature or signatures
shall have the same force and effect as an original agreement with inked
original signatures.
12. Waiver No waiver by any party hereto of any provision hereof shall be
deemed to be a waiver of any other provision hereof or of any subsequent breach
of the same or any other provision hereof.
13. Amendment This Agreement cannot be amended or modified except by a
writing executed by the parties hereto which expresses, by its terms, an
intention to modify this Agreement.
14. Successors This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
administrators, trustees, executors, personal representatives, successors and
permitted assigns.
15. Confidentiality Except as is noted below, neither the Parties, nor the
respective employees, agents, or attorneys of any of them shall disclose the
terms and existence of this Agreement or any documents and/or evidence produced
or learned of during discovery, including third party discovery, written
discovery, depositions or the facts discovered in this action to any third
person without the prior written consent of the other parties to this Agreement.
This confidentiality agreement shall never expire.
The exceptions are that such information as is necessary may be disclosed:
(a) If required by operation of law or court order or by way
of subpoena with reasonable notice to the Parties to afford
any opposing Party an opportunity to move to quash said
subpoena or seek a protective order;
(b) To the officers, directors, employees, agents, attorneys,
corporate affiliates (including officers, directors,
employees, agents and attorneys thereof) of the parties to
this Agreement;
(c) In an action to enforce the terms of this Agreement;
(d) Upon inquiry from third parties as to the results of the
litigation, the parties may only disclose that the matter has
been resolved.
In the event that either party intends disclosure pursuant to subsection
(a) of this Section 15, at least ten (10) days written notice will be given to
the other parties hereto and their counsel prior to disclosing such information,
setting forth all information that is proposed to be disclosed, the identity of
each person to whom the information is to be disclosed, the reasons for such
disclosure and the circumstances pursuant to which disclosure is proposed to be
made.
16. Integration This Agreement constitutes the final and complete agreement
of the parties hereto with respect to the subject matter hereof and supersedes
all prior or contemporaneous negotiations, promises, covenants, agreements or
representations concerning any matters directly, indirectly or collaterally
related to the subject matter of this Agreement. The parties hereto have
expressly and intentionally included in this Agreement all collateral or
additional agreements which may, in any manner, touch or relate to any of the
subject matter of this Agreement; therefore, all promises, covenants and
agreements, collateral or otherwise, are included herein. The parties
acknowledge that in entering into this Agreement, neither has relied on any
statement, promise, representation or warranty whatsoever, which is not
expressly contained herein. It is the intention of the parties to this Agreement
that it shall constitute an integration of all their agreements, and each
understands that in the event of any subsequent litigation, controversy or
dispute concerning any of its terms, conditions or provisions, no party hereto
shall be permitted to offer or introduce any oral or extrinsic evidence
concerning any other alleged collateral or oral agreement between the parties
not included herein.
17. Miscellaneous.
17.1. This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
17.2. This Agreement shall be deemed to have been drafted jointly by the
parties hereto; accordingly, any rule pertaining to the construction of
contracts to the effect that ambiguities are to be resolved against the drafting
party shall not apply to the interpretation of this Agreement or of any
modifications of or amendments to this Agreement.
17.3. The paragraph headings contained in this Agreement are for
convenience of reference only and shall not affect the interpretation or
construction of this Agreement.
17.4. No failure or delay in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder.
SIGNATURES
CRS EMERGENCY VEHICLES
Date: _____________ By:____________________________
[Signature]
----------------------------
[Print Name and Title]
CUSTOM COACH INTERNATIONAL
Date: _____________ By:____________________________
[Signature]
----------------------------
[Print Name and Title]
Date: _____________ ______________________________
C. XXX XXXXX
[Signature]
AURA SYSTEMS INC.
Date: _____________ By:____________________________
[Signature]
----------------------------
[Print Name and Title]
APPROVED AS TO FORM AND CONTENT:
XXXXXXX, XXXXXX & XXXXX LLP
By:____________________________
R. XXXXXX XXXXXX
Attorneys for AURA SYSTEMS, INC.
THE XXXXXXXX FIRM
By:______________________________
XXXXXX X. XXXXXXXX
WILL X. XXXXXX
Attorneys for CRS EMERGENCY
VEHICLES, CUSTOM COACH
INTERNATIONAL, C. XXX XXXXX
-----------------------------------------------------
1 See, Exhibit "C" attached to plaintiff's Complaint.
2 See, California Civil Code ss. 3289(b); "the obligation shall
bear interest at a rate of 10% per annum after a breach."
Pre-judgment interest was calculated to May 1, 2002, as
follows: (a) $266,000 was due on 07/12/01 (292 days) at 10% =
$21,280; (b) $266,000 was due on 08/30/01 (243 days) at 10% =
$17,709; (c) $266,000 was due on 09/30/01 (212 days) at 10% =
$15,450; (d) $436,729 was due on 10/15/01 (197 days) at 10% =
$23,570; Total: $78,009.
3 See, U.S.D.C Central District Local Rule 55-4; "$5,600 plus 2% of the amount
over $100,000."
4 Court costs to date: (a) filing fee: $150; (b) service fees: $290 = $440
